13 may 2020

Small Cap Feast

Small Cap Feast – 13 may 2020

Dish of the Day:

No Joiners Today

Off the Menu:

No Leavers Today

What’s Cooking in the IPO Kitchen?

The pantry is empty, again!

Breakfast Buffet

Modern Water 2.16p £10.8m (MWG.L)

Following the collaboration agreement with Ion Exchange , an order for stage one of a two stage project with a total value of c. £900,000 project has been received. The estimated net value to Modern Water for stage one is approximately £50,000 and for both stages is between c. £235,000 and c. £270,000.

AorTech 91p £14.7m (AOR.L)

Trading update ahead of the publication of the Group’s audited final results for the financial year ended 31 March 2020, which are expected to be released in the second half of July 2020.

Highlights:

Growth in polymer licensing and royalty revenue from £463k to £490k

Strong cash position of £2.0 million as at 31 March 2020 (2019: £2.4 million)

Research and Development activities currently exceeding the Board’s expectations

Integration of RUA Medical Devices Limited progressing to plan

Applegreen 280p £338m (APGN.L)

The roadside convenience retailer, has successfully completed a process to access additional facilities and secure its liquidity for the likely duration of the COVID 19 crisis.

The Group has converted EUR52.5m of the accordion facility in its existing Applegreen plc banking facilities into its Revolving Credit Facility, which represents an increase to the committed funding available for the remaining term through to October 2023. Applegreen plc’s lenders have also agreed to substantially relax or remove covenant conditions for the tests arising in each quarter up to and including June 2021.

“Whilst it is important to have additional headroom in our facilities, we do not anticipate drawing down these additional facilities. We reiterate our view that we have sufficient cash to get us through this cycle based on a scenario where movement continues to be severely restricted to the end of May with the expectation that restrictions will then ease gradually before normalising in Q4. We also expect to have adequate existing cash resources to trade through a downside scenario where the recovery period is more prolonged, to the end of 2021.

All our sites have remained open and current trading levels are ahead of our baseline assumptions for Q2 while the reduction in our working capital levels are consistent with our expectations. We also note that the recent easing of movement restrictions in each of our markets has resulted in increased traffic volumes.”

Gaming Realms 10p £28.5m (GMR.L)

The developer and licensor of mobile focused gaming content has signed a 2-year agency deal with Hasbro Inc , the global play and entertainment company committed to creating the world’s best play and entertainment experiences.

Under the terms of the agreement, Hasbro will have exclusive rights to act as an agent on behalf of the Group to identify and help negotiate licensing opportunities for the Slingo brand in various digital gaming categories.

With an established market presence in land based and digital gaming, through its Monopoly brands, the deal will enable Hasbro to bring further licensing opportunities to Gaming Realms in new and existing territories in certain digital gaming categories outside the online real money gaming and lottery segments.

World High Life 8p £11.65m (AQSE:LIFE)

Its wholly owned subsidiary, Love Hemp Ltd continues to focus on new product development to drive sales growth and reach customers.

The importance of the Love Hemp brand’s ability to be flexible and agile whilst responding to consumer needs has never been more apparent, with Love Hemp Immune launching six-months ahead of schedule, whilst the brand’s global online retailer, CBDOilsUK has expanded its portfolio with the launch of one of the most affordable collections of CBD capsules and oils available to-date, 2020 Botanics.

— Made with the highest quality ingredients, including a combination of CBD, Vitamin C, Vitamin D and Bilberry extract – all essential supplements that support a healthy immune system

Love Hemp’s global online retailer, CBDOilsUK is expanding its product portfolio with the launch of its new CBD range, 2020 Botanics – five new products ranging from high to low strength in both capsule and oil formats

Bluerock Diamonds 55p £2.9m (BRD.L)

Update on its operations and marketing strategy further to the recommencement of operations earlier this week. The Company’s ability to operate has been dependent upon the stance taken by the South African Government in dealing with the pandemic. Secondly, whether BlueRock can operate profitably will depend on when and how the global diamond market responds/recovers and returns to a point where the Company can sell its diamonds again profitably. Having adapted its working practices to comply with the South African Government regulations and now established a new route to market together with associated finance, the Board believes that the Company can operate in the current environment.

Egdon Resources 1.85p £6m (EDR.L)

Update on the Wressle development in North Lincolnshire Licences PEDL180 and PEDL182 where the Company holds a 30% operated interest. “Following NLC approval of the installation plan and discharge of the associated planning condition we have now completed the installation of four groundwater monitoring boreholes on the Wressle site. These boreholes will be subject to monitoring and analysis throughout the life of the site, with an initial three months of sampling to determine baseline groundwater quality. As previously advised, on current plans, the Company envisages first oil during H2 2020.”

Tri-Star Resources 20p £19m (TSTR.L)

update on its investment in Strategic & Precious Metals Processing LLC, an antimony and gold production facility in the Sultanate of Oman in which the Company holds a 40% equity interest. SPMP has sold and on 6 May SPMP shipped its first consignment of antimony comprising 60 tonnes of antimony metal ingots. This is an important step in the ramp-up of operations at SPMP. The management of SPMP expects the plant to be operating at 50% of capacity by the end of Q2 2020 and 100% by the end of the year. As also announced on 8 April 2020, OIF has issued a Request for Arbitration, commencing an arbitration proceeding with Tri-Star, DNR and SPMP as Respondents. A Sole Arbitrator has now been appointed but has yet to make contact with the parties.

Fox Marble Holdings 3.1p £8.14m (FOX.L)

Fox Marble has commenced processing the contract announced on 14 April 2020 to supply up to 20,000 square metres of paving for Suhareka town square, Kosovo. Fox Marble is now processing the paving slabs in order to supply its material in time for its customer to start the installation as soon as the current lockdown provisions in Kosovo are eased. Material already specified and contracted under the first two stages of the project has a total value in excess of €400,000 and, once all 20,000 square metres has been supplied, the project is expected to be worth in excess of €750,000.

Oxford Biomedica 741p £570m (OXB.L)

The gene and cell therapy group, announced today the successful outcome of their recent UK Medicines & Healthcare products Regulatory Agency (MHRA) inspection, resulting in the issue of a Certificate of GMP compliance for the first two GMP manufacturing suites and supporting area such as warehouse, cold chain facilities and QC laboratories, in its new Oxbox manufacturing facility.

Oxbox is Oxford Biomedica’s new 7,800 m2 commercial manufacturing centre, located in Oxford, UK. Phase I is 4,200 m2 of developed area consisting of six GMP manufacturing suites – four for viral vector production and two for fill-finish, warehousing and cold chain facilities and support laboratories. Construction was completed at the end of 2019. This approval by the MHRA of the first two suites enables commercial production of batches to commence for partner programmes within the coming weeks.

Head Chef:

Derren Nathan
0203 764 2344
derren.nathan@hybridan.com

*A corporate client of Hybridan LLP

Disclaimer

This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to any such action. This document has no regard for the specific investment objectives, financial situation or needs of any specific person or entity and is not a personal recommendation to any such person or entity. Recipients should reach an individual investment decision, based upon their respective financial objectives and financial resources and, if any doubt, should seek advice from an investment advisor.

The information contained in this document is based on materials and sources that are believed to be reliable; however, such information has not been independently verified and therefore it is not possible to confirm such information as being accurate. This document is not intended to be a complete statement or summary of any securities, markets, reports or developments referred to herein. No representation or warranty, either express or implied, is made or accepted by Hybridan LLP, its members, officers, employees, agents or associated undertakings in relation to the accuracy, completeness or reliability of the information contained in this document, nor should it be relied upon as such.

The content of this document includes market commentary and other information which we have prepared in relation to the company referred to in this document, which is our broking client. The provision of this document to you constitutes a minor non-monetary benefit which is capable of enhancing the quality of service provided by Hybridan LLP and which is of a scale and nature which could not be judged to impair the duty of Hybridan LLP to act in the best interest of its client falling within article 24(7)(b) of Regulation 600/2014/EU (MIFID II Regulation).

Any and all opinions expressed are current as of the date appearing on this face of this document only. Any and all opinions expressed are subject to change without notice and Hybridan LLP is under no obligation to update the information contained herein. To the fullest extent permitted by law, none of Hybridan LLP, its members, officers, employees, agents or associated undertakings shall have any liability whatsoever for any direct or indirect or consequential loss or damage (including lost profits) arising in any way from use of all or any part of the information in this document.

This document should not be relied upon as being an independent or impartial view of the subject matter and, for the avoidance of doubt, constitutes non-independent research (as such term is defined in the Financial Conduct Authority’s Conduct of Business Sourcebook to reflect the requirements of the MIFID II Regulation and Directive 2014/65/EU (known as MIFID II)). The individuals who prepared this document may be interested in shares in the company concerned and/or other companies within its sector, may be involved in providing other financial services to the company or companies referenced in this document or to other companies who might be said to be competitors of the company or companies referenced in this document. As a result both Hybridan LLP and the individual members, officers and/or employees who prepared this document may have responsibilities that conflict with the interests of the persons who receive this document. Hybridan LLP and/or connected persons may, from time to time, have positions in, make a market in and/or effect transactions in any investment or related investment mentioned herein and may provide financial services to the issuers of such investments.

In the United Kingdom, this document is directed at and is for distribution only to persons who (i) fall within article 19(5) (persons who have professional experience in matters relating to investments) or article 49(2) (a) to (d) (high net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529) (as amended) or (ii) persons who are each a professional client or eligible counterparty (as those terms are defined in the Financial Conduct Authority’s Conduct of Business Sourcebook) of Hybridan LLP (all such persons referred to in (i) and (ii) together being referred to as relevant persons). This document must not be acted on or relied up on by persons who are not relevant persons. For the purposes of clarity, this document is not intended for and should not be relied upon by any person who would be classified as a retail client under the Financial Conduct Authority’s Conduct of Business Sourcebook.

Neither this document, nor any copy of part thereof may be distributed in any other jurisdictions where its distribution may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Distribution of this report in any such other jurisdictions may constitute a violation of territorial and/or extra-territorial securities laws, whether in the United Kingdom, the United States or any other jurisdiction in any part of the world.

Where possible this document is made available to all relevant recipients at the same time. Dissemination of research by Hybridan LLP is monitored to ensure that it is only provided to relevant persons. Research prepared by Hybridan LLP is not intended to be received and/or used by any person who is a retail client.

Hybridan LLP and/or its associated undertakings may from time-to-time provide investment advice or other services to, or solicit such business from, any of the companies referred to in this document. Accordingly, information may be available to Hybridan LLP that is not reflected in this material and Hybridan LLP may have acted upon or used the information prior to or immediately following its publication. In addition, Hybridan LLP, the members, officers and/or employees thereof and/or any connected persons may have an interest in the securities, warrants, futures, options, derivatives or other financial instrument of any of the companies referred to in this document and may from time-to-time add or dispose of such interests.

This document may not be copied, redistributed, resent, forwarded, disclosed or duplicated in any form or by any means, whether in whole or in part other than with the prior written consent of Hybridan LLP.

MIFID II status of Hybridan LLP research
The cost of production of our corporate research is met by retainers from our corporate broking clients. In addition, from time to time we issue further communications as market commentary (such as our daily newsletter, Small Cap Breakfast), which we consider to constitute a minor non-monetary benefit which is capable of enhancing the quality of service provided by Hybridan LLP and which is of a scale and nature which could not be judged to impair the duty of Hybridan LLP to act in the best interest of its client falling within article 24(7)(b) of the MIFID II Regulation.

Hybridan LLP is a limited liability partnership registered in England and Wales, registered number OC325178, and is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange. Any reference to a partner in relation to Hybridan LLP is to a member of Hybridan LLP or an employee with equivalent standing and qualifications. A list of the members of Hybridan LLP is available for inspection at the registered office, 2 Jardine House, The Harrovian Business Village, Bessborough Road, Harrow, Middlesex HA1 3EX.

If you would like to unsubscribe, please email enquiries@hybridan.com with “unsubscribe me”.

Member of the London Stock Exchange. AIM broker and advisor.
LEI: 213800EF56WXNQPZDD73
LSE Member Mnemonic: HYLLGB21